What Brexit Can Teach Us About the Rust Belt

This new round of globalization punishes the culturally insular, not the economically self-sufficient.

By Jim Russell

A march from Trafalgar Square to Parliament to protest the Brexit vote. (Photo: Sam Greenhalgh/Flickr)

I was there, toward the end of 1999, at the Battle in Seattle. The World Trade Organization, putting a face and place on globalization, held its ministerial conference at the Washington State Convention and Trade Center. My interest in the meeting concerned the official involvement of non-governmental organizations and the possibilities of a functioning system of global governance. Instead, I found myself in the middle of political chaos as protesters conveyed their disdain for and distrust in such international institutions. After the rubber bullets stopped flying and the tear gas dispersed, members of both the anti-globalization left and right (strange bedfellows, indeed) felt a historic moment was at hand. They would beat back neo-liberalism and restore the people’s sovereignty. At the time, I believed them.

September 11, 2001, was the day the anti-globalization movement died. World trade took a figurative and literal hit. Given recent events, such as the affirmative referendum of Britain’s exit from the European Union, perhaps the cause took a long nap. The sudden fixation on terrorism made anti-globalization un-American. Ardent nationalists who feared a New World Order conspiracy would no longer march next to Greenpeace members advocating for sea turtles. The left fragmented along differences I observed while researching in Seattle. With one bogeyman (globalization) in the closet, another one (terrorism) took its place. The historic moment evaporated.

Disconnectedness defines danger. Saddam Hussein’s outlaw regime is dangerously disconnected from the globalizing world, from its rule sets, its norms, and all the ties that bind countries together in mutually assured dependence.

Instead of a war against globalization within the country, the United States was waging a war for globalization. Given the perceived existential threat, most Americans got behind the effort. While Barnett is arguing that the disconnected be allowed to join the connected, events played out protecting the connected from the disconnected. Remove that fear and the search begins for another bogeyman.

Right around September 11, 2008, is the day that the terrorism bogeyman died. Lehman Brothers was melting down, bringing the world’s financial system with it. Also dying that day was globalization. Long live globalization!

For the better part of a decade, we’ve been living between two globalizations. The globalization that died during the Great Recession fixated on the world trade of manufactured goods, the tangible economy. For Barnett, disconnection from globalization meant autarky. For the protesters in Seattle, anti-globalization also meant autarky. Economic independence was desirable and feasible. That’s a big tent that the extreme left and right could live under in uneasy harmony. Make what you need and forget about trade.

After the Great Recession, the globalization of the intangible economy is ascendant. In 2011, almost 10-years after 9/11, Marc Andreessen declared that “software is eating the world.” Hewlett-Packard, a hardware company synonymous with the rise of Silicon Valley, pivoted to software. In other words, the globalization of technology hardware was complete. The time had come for the globalization of software. Workers make applications, not widgets. We cannot hold the fastest growing part of the economy in our hands: Intangible.

Anti-globalization of the tangible kind caught fire in 1999. On the right, cultural sovereignty was at stake. On the left, economic sovereignty was imperiled. In 2016, anti-globalization of the intangible is on fire with Brexit, the United Kingdom’s divorce from the European Union. A blog post about the explanations for the “leave” vote uses terminology from the more familiar tangible globalization, neo-liberalism, and traditional values. Neither one nor the other fully explains Brexit, leading to a mix of both and an intriguing definition of intangible globalization:

[There’s] a secular change underway in the economy that on the whole rewards cosmopolitan values and penalizes traditional ones, increasing the divide and building the kind of resentment that some people had blamed mainly on neoliberalism.

The shift from tangible to intangible globalization is the “secular change.” As for neo-liberalism, it didn’t necessarily penalize traditional values. China could dominate the tangible economy and still be China. Currently, Japan is trying to figure out how to remain Japanese and be relevant to the intangible economy. This new round of globalization punishes the culturally insular, not the economically autarkic.

In the Rust Belt, presidential candidate Donald Trump panders to the enemies of tangible globalization. He promises the return of steel mills, which currently flounder everywhere in the world including China. He wants to protect an economy that matters less and less with each passing day. But what his Southwestern Pennsylvanian constituents really love is how Trump waves his middle finger at those smug cosmopolites in Pittsburgh proper making all that money off of the intangible economy.

Much of the Pittsburgh region used to benefit from world trade. Today, a few neighborhoods in the city benefit. Even in the urban core, parochial neighborhoods languish in isolation. They do not have the social skills required for the intangible economy. The prosperity next door might as well be on the other side of the world.